Willem-Alexander became the country’s first king since 1890 when his 75-year-old mother signed the abdication deed earlier on Tuesday after 33 years on the throne.
Huge crowds of orange-clad partygoers are in Amsterdam to pay tribute.
Now known as Princess Beatrix, the former queen maintained a recent Dutch tradition of monarch’s handing over power to a new generation.
Wearing the royal mantle, the new king swore to uphold the constitution at a colorful enthronement ceremony in the Nieuwe Kerk, a decommissioned church, before a joint session of the Dutch parliament.
“I swear that I shall defend and preserve the independence and territory of the state with all my powers,” he said.
“That I shall protect the general and individual freedom and rights of all my subjects and shall use all available means granted to me by law for preserving and promoting general and individual prosperity as I befitting of a good king…. So help me God almighty.”
Crowds in the square outside cheered as the announcement of his inauguration was made from a balcony overlooking the square amid trumpet fanfare.
In the evening, the royal family will take part in a water pageant.
Queen Beatrix had announced her intention to stand down in January, saying her son Willem-Alexander was ready to reign and that it was time for the throne to be held by “a new generation”.
She formally relinquished the throne at a short ceremony in the Royal Palace on Tuesday, signing a statement transferring the monarchy to Prince Willem-Alexander “in accordance with the statutes and the constitution of the Kingdom of the Netherlands”.
There were huge cheers from the crowds outside in Dam Square, who were watching the ceremony on giant television screens, as she, her son and his wife Maxima – a 41-year-old Argentine-born investment banker – signed the deed of abdication.
Shortly afterwards, the three royals emerged on a balcony above the square.
The visibly emotional Princess Beatrix told the crowds: “I am happy and grateful to introduce to you your new king, Willem-Alexander.”
King Willem-Alexander thanked mother for “33 moving and interesting years”, saying he and the public and people in Dutch overseas territories were “intensely grateful” to her.
The three then held hands as the national anthem was played, before the new king and queen’s three young daughters were brought out to wave at the crowds.
The royalcouple’s eldest daughter, 9-year-old Catharina-Amalia, has become Princess of Orange and is now first-in-line to the throne.
Many international royals and high-ranking dignitaries are taking part in the events, including the UK’s Prince Charles and the Duchess of Cornwall, Prince Felipe and Princess Letizia of Spain and Denmark’s Crown Prince Frederik and his wife.
Willem-Alexander has said he wants to “be a king that can bring society together, representative and encouraging in the 21st Century”.
He has said he does not expect to be called “his majesty,” saying people can address him “as they wish”.
King Willem-Alexander is the seventh monarch from the House of Orange-Nassau, which has ruled the Netherlands since the early 19th Century.
Under Dutch law, the monarch has few powers and the role is considered ceremonial.
He or she is expected to be politically impartial, co-sign acts of parliament, help with the formation of new governments and to undertake state visits.
King Willem-Alexander has become not only the monarch of the Netherlands but also the Dutch Caribbean territories of Curacao, Aruba and Sint Maarten. He holds several military titles but requested an honorable discharge before his accession.
In recent decades it has become the tradition for the monarch to abdicate.
Queen Beatrix’s mother Juliana resigned the throne in 1980 on her 71st birthday, and her grandmother Wilhelmina abdicated in 1948 at the age of 68.
Queen Beatrix remained active in recent years, but her reign has also seen traumatic events.
In 2009 a would-be attacker killed eight people when he drove his car into crowds watching the queen and other members of the royal family in a national holiday parade.
In February last year her second son, Prince Friso, was struck by an avalanche in Austria and remains in a coma.
Abdication day in the Netherlands:
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